President Benigno Aquino vowed Sunday to bring criminal charges against Muslim rebel leader Nur Misuari for a deadly attack on a major southern Philippine city that left hundreds dead or injured.

"Our investigators are making sure that Misuari will be made to answer for all these," Aquino told a news conference in Zamboanga city shortly before boarding a jet to return to Manila.

"We now have witnesses who will directly link him to this conflict, and the charges are being prepared by the Department of Justice," he added.

About 200 rebels from the Moro National Liberation Front (MNLF) founded by Misuari entered Zamboanga, a major trading centre with one million residents, on September 9.

They took over several coastal districts, burning thousands of homes and taking scores of civilians hostage, in protest at an impending peace deal with a rival Muslim rebel group.

Aquino flew to the area on September 13 to take direct command of operations, with about 4,500 soldiers deployed to the city to push back the rebels.

More than 10,000 houses were set on fire and 111,000 civilian residents fled the street battles, according to the civil defence office in Manila.

The military said there are now just several dozen fighters left, holding at least 20 hostages in one neighbourhood of dense clusters of homes.

"We're now engaged in close-quarter combat, we are going from house to house, room to room," military spokesman Lieutenant-Colonel Ramon Zagala told AFP.

The military wanted to conclude the operations as soon as possible, he said, but would not give a timetable.

One soldier was killed and 10 others were wounded in the past 24 hours, Zagala said.

In two weeks of fighting 102 guerrillas were killed with 117 others taken into custody, he said.

Fourteen soldiers and police died and 114 were wounded, he added.

Twelve civilians were killed and 49 wounded, while more than 170 hostages have been freed or were able to escape, Zagala said.

Aquino said the government's firm response would have impressed on Misuari's followers the high price of mounting similar challenges to state authority in the future.

"It should not happen here anymore, but in case it does, our security forces are ready," he added.

Muslim rebels have been fighting since the 1970s for an independent or autonomous homeland in the south of the mainly Catholic Philippines. An estimated 150,000 people have died in the conflict.

The MNLF signed a peace treaty in 1996 that granted limited self-rule to the south's Muslim minority.

However MNLF founder Misuari deployed some of his men to Zamboanga to demonstrate opposition to a planned peace deal between the government and the remaining major Muslim rebel group, the 12,000-strong Moro Islamic Liberation Front.

The MILF is close to signing the peace pact, which Misuari believes would sideline the MNLF.